Economic toll of haze in Malaysia could hit RM1.5b a month as business and health costs mount, experts say

KUALA LUMPUR, Oct 14 — Malaysia's economic stability is being threatened by the prolonged transboundary haze, with experts estimating the cost to be between RM20 million and RM50 million daily, potentially surging to RM600 million to RM1.5 billion monthly, according to Sunway University economics professor Dr Yeah Kim Leng. The tourism, aviation, and agriculture sectors are the most vulnerable, with tourism arrivals potentially dropping by 8%, leading to GDP losses of up to RM1.5 billion.

In agriculture and plantation sectors, Johor vegetable farmers are reporting production declines, fruit yields have dropped by half, and palm oil faces a lagged impact. Reduced visibility and hazardous air quality also result in delays for freight logistics, construction site halts, and suppressed retail activity. Dr Mohd Hafiz Jaafar, a public health medicine specialist from Universiti Sains Islam Malaysia, emphasized that direct medical expenses only scratch the surface of the crisis.

Nationally, medical costs from respiratory illness have risen from RM21 million in the 1997 haze to RM410 million in 2013, excluding indirect costs from heart and blood vessel damage. Beyond hospital bills, Hafiz noted the hidden costs of staff absenteeism, reduced productivity, and lost output, making haze a significant economic as well as health issue.

He called for cross-border collaboration with Indonesia to prevent fires at their source, arguing that regional prevention is far more cost-effective than absorbing recurrent financial losses. Hafiz reiterated that the cost of repeatedly dealing with the crisis is too high to ignore.